In this issue:

• Carpe Diem - Seize The Day

• Warrants: The Best Feature

• Warrants: To Exercise or Not Exercise?

• Warrants: Do I Need to Hold until Expiration?

• Warrants: What Happens to Warrants in a Merger?

Carpe Diem - Seize The Day

We currently have the world's financial and currency markets in turmoil. The debt issues of the world, the latest being Hungary driving down the markets on Friday.

Yesterday at lunch here in Ajijic, Mexico I was able to overhear a conversation at the adjoining table. A group of 8 Mexicans were speaking in English about the issues confronting the world including the problems in Hungry, Greece and yes, the United States. True these were professionals and savvy individuals but I was surprised to hear these discussions and concerns. Their conclusion was and is the same as ours - BUY GOLD.

We continue to believe the gold will breakout to new highs very soon. The question is will the shares of the juniors follow or will be they be held captive to the direction of the financial markets which many believe are breaking down? We honestly do not know the answer to this question but we believe our day will come when the juniors will explode providing investors with incredible gains.  We suggest that investors be strategically positioned now for this move while also holding some cash to buy at lower levels IF the opportunity presents itself.

Take this opportunity now, Carpe Diem - Seize The Day to get on board now or increase your positions in some of our preferred holdings.

Warrants: The Best Feature...

There are many great features of warrants but in our opinion perhaps the best is TIME. Sure you will hear much more advertising about options but options have a very short life compared to most warrants and frankly, the statistics reflect that 80% to 90% of options will expire worthless.

There are many examples of warrants which if you had owned back in the meltdown of Sept - Nov 2008 are still trading. Options and most LEAPS would have expired long ago leaving you with a 100% loss.

TIME cannot be underestimated in these volatile markets. Try and stay will long-term warrants (remaining lives of over 2 years) and you greatly increase your chances of investment success.

Warrants: To Exercise or Not Exercise?

Let me answer this question with a question.

Why would you ever want to exercise a warrant? We have never found it beneficial for a warrant holder to exercise their warrants. Never!! You purchase warrants when you believe in the company and they have a long-term warrant which appears to be reasonably priced and offering good upside leverage over the common shares. You sell the warrants when you believe the common shares of the company have peaked. Your attention should be focused on the common shares for purposes of charting, etc. When it is time to sell the common, it is time to sell your warrants.

The exercise of warrants is best left to the arbitrage players or funds, never to be used by average investors.

Warrants: Do I Need to Hold until Expiration?

Again, I will ask the question to you; why?

Once you purchase warrants based on your belief in the underlying company, you can sell them at any time. Warrants trade just like the common shares so when you belief the common shares have peaked you just sell the warrants as well.

What is important when buying the warrant is how much time remains until expiration. The more time remaining the better. Our rule of thumb is two years or more giving you more time in these very volatile markets.

Warrants: What Happens to Warrants in a Merger?

The answer depends on the particular circumstances of the merger. Most mergers are shares for shares, thus the acquired company receives common shares in the acquiring company. These merger terms will dictate the new terms as well for the warrants.
 

1. Acquired Company: If there are warrants trading on the company being acquired, the warrants will live on as warrants of the acquiring company with the same expiration date but the terms will be adjusted to reflect the terms of the merger.
 

2. Acquiring Company: If the acquiring company has warrants trading there will be no effect upon the warrants other than the possible dilution affecting the     shareholders as well. 

Only once in the last 5 years do we recall a merger for cash, Bolivar Gold. The warrant holders as well were offered cash for their warrants, a very rare event.

Our personal observation is that warrants of the acquired company due to the re-working of the terms of the warrants effectively lose their great leverage for which we originally bought them. Yes, the warrants live on as warrants of the acquiring company but in virtually all cases the leverage is diminished. We would as a blanket rule say to sell the warrants of the acquired company and look for other buy candidates. A current example, is the merger between Quadra Mining and FNX Mining to be completed next week. The outstanding warrants on FNX Mining will now become warrants on the new company, Quadra FNX Mining. We will be performing the final calculations on the leverage using the new terms next week but we recommended that holders of the FNX warrants sell them upon the initial announcement of the merger, at substantially higher prices than the current.

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For those of you who have not yet subscribed to our services, please keep reading.....

Act Immediately

 Six (6) Companies You Must Buy NOW

A few weeks ago we issued this Special Report. The six companies are still selling at substantial the same prices thus still representing great entry prices for savvy investors.

It is not to late so if you are not yet a subscriber sign up now and join us.

We uploaded this Special Report to our website and it is available to all paid subscribers of any of our services. The Special Report has been included in our Special Reports section, left column, after you have logged into our website.

Act Immediately to get access to this report. The recent sell off in the markets has provided us with some lower entry prices. In our Special Report we even suggest how you should allocate your investment dollars.

This Special Report will be available to all subscribers, Silver and Gold, so we hope you will join us very soon.

The six companies include:
1 gold company - producing and making money
3 silver companies - all producing and making money
2 oil and gas companies

Of the six, we are suggesting you buy the long term warrants on two of those companies.

What we really like about these six suggestions is that all of them can be bought below $1.00 and one as low as C$0.14.

We encourage investors to buy a basket of these selections and we suggest the ratio to invest in each in our Special Report.

We expect all of these companies to perform extremely well in the coming months as the markets settle down.

Possible Subscriber Question:
Dudley, with the current market environment, should I purchase these positions now or wait for lower prices?

Dudley:
We do not have a crystal ball as to the short term direction of the markets. Will the 'sell in May' prevail once again? We don't know. That said, we suggest establishing your positions now. If we get lower prices - buy more and be prepared to hold for a minimum of one year.

All subscribers will have immediate access to this Special Report which will be included in our Special Reports section (left column) after logging in to our services.

I have a substantial position in all six of these companies or the warrants.

 

A Peek At My Portfolio

Some of my closed out positions:

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Warrants Learning Center - For those needing more information about warrants please don't forget our Learning Center. Also, we have a Live Chat Feature on our website, check them out.

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For those readers and subscribers unfamiliar with all of our services:

• PreciousMetalsWarrants.com provides an online database for all warrants trading on the natural resource companies in the United States and Canada.

• InsidersInsights.com tracks the buying and selling of corporate insiders with a focus on the junior mining and natural resource sectors. Buy and Sell Alerts are issued as deemed relevant based upon our analysis.

There are many great opportunities presented in each of these services and we encourage you to get on board with us soon.
 

    Dudley

Dudley Pierce Baker - Owner/Editor - Guadalajara/Ajijic, Mexico
Lorimer Wilson - Director of Marketing and Contributing Editor - Toronto, Canada
Bruce Ross - Webmaster and Administrative Assistant - Phoenix, USA